ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Alamo Group's annualized return on capital (ROC %) for the quarter that ended in Mar. 2026 was 10.40%.
As of today (2026-07-01), Alamo Group's WACC % is 11.87%. Alamo Group's ROC % is 9.46% (calculated using TTM income statement data).
Alamo Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Alamo Group (MEX:ALG) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Alamo Group's WACC % is 11.87%. Alamo Group's ROC % is 9.46% (calculated using TTM income statement data).
Alamo Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Alamo Group ROC % Related Terms
Alamo Group ROC % Historical Data
* Premium members only.
The historical data trend for Alamo Group's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Alamo Group (MEX:ALG) has a ROC % of 10.40% as of Mar. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Alamo Group and its competitors.
Is Alamo Group's ROC % too high?
Alamo Group's current ROC % is 10.40%. The Farm & Heavy Construction Machinery industry median ROC % is 5.56. Alamo Group's value of 10.40% is 87.1% above this industry median. Overall, Alamo Group has a GF Score™ of 82/100, reflecting its overall financial health beyond just this single metric.
How does Alamo Group's ROC % compare to BLBD and ASTE?
Alamo Group's ROC % of 10.40% can be compared against companies in the Farm & Heavy Construction Machinery industry. The industry median ROC % is 5.56. Alamo Group's value of 10.40% is 87.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Farm & Heavy Construction Machinery company?
The median ROC % among Farm & Heavy Construction Machinery companies is 5.56, based on 208 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Alamo Group's current ROC % of 10.40% is 87.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Alamo Group and its competitors. For the Farm & Heavy Construction Machinery industry, the median ROC % is 5.56 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Alamo Group's current ROC % is 10.40%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Alamo Group stock overvalued right now?
Alamo Group (MEX:ALG) has a current ROC % of 10.40%. The stock's GF Value™ is MXN3,946.62, compared to a current price of MXN3,500.00 — trading 11.3% below its estimated fair value. The current ROC % is 10.40% and 87.1% above the Farm & Heavy Construction Machinery industry median of 5.56. Alamo Group's overall GF Score™ is 82/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Alamo Group (MEX:ALG), the current ROC % is 10.40% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Alamo Group (MEX:ALG) Overvalued in 2026?
Based on GuruFocus' analysis, Alamo Group stock appears to be undervalued.
The current stock price of MXN3,500.00 is trading 11.3% below its estimated GF Value™ of MXN3,946.62.
Key valuation signals for MEX:ALG:
ROC %: 10.40%
GF Value™: MXN3,946.62 vs. price of MXN3,500.00 (11.3% below fair value)
Industry Position: 87.1% above the Farm & Heavy Construction Machinery median
No single metric tells the full story. See the MEX:ALG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Alamo Group Inc is engaged in the design, manufacture, and servicing of high-quality vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use. Its products include agricultural implements, tree and branch chippers, forestry/wood recycling equipment, street and parking lot sweepers, leaf and debris collection equipment, truck-mounted highway attenuator trucks, vacuum trucks, hydro-excavation equipment, telescopic boom excavators, snow removal equipment, etc. The company's reportable segments are Vegetation Management, which generates the maximum revenue, and Industrial Equipment. Geographically, the company generates maximum revenue from the United States, followed by Canada, France, the UK, Brazil, the Netherlands, and other regions.
82GF Score
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